Cisco buys UK-based NDS for £3bn

Summary:The purchase of the Staines-based pay-TV technology company is expected to boost Cisco's Videoscape content-delivery suite and help Cisco's video division expand into territories such as India and China

NDS, which is headquartered in Staines, provides broadcasters with
secure video delivery, digital rights management and other services. The assets brought in under the deal will let Cisco strengthen its own Videoscape content-delivery platform, the networking giant said in its announcement on Thursday. They will also be expected to help Cisco expand into territories
such as China and India, where NDS already has a strong presence.

"NDS's customer portfolio will broaden Cisco's presence into new
segments of the service provider market," Marthin De Beer, Cisco's
video and collaboration chief, wrote in a
blog post. "It will expand Cisco's reach into emerging markets
where NDS has a strong footprint, with customers such as CCTV in China
and Bharti and TataSky in India."

On the other side, the deal is expected to allow NDS to work with a greater variety of set-top
box manufacturers.

"NDS's open software video platform and services are highly
complementary to Cisco technology, and together we are uniquely
positioned to enable service providers to deliver... multi-screen video services to their customers," the British company's executive chairman Abe Peled said in a statement.

NDS's software includes viewing clients and content security tools. These, together with NDS's systems
integration capabilities, will "accelerate the delivery" of
Cisco's Videoscape platform, according to the San Jose-based company.

NDS history

The buyout, which equates to £3.2bn, involves a $4bn cash payment and the assumption of $1bn
in debt. The deal will provide major windfalls for NDS's two current owners:
the private equity company Permira, which has a 51-percent stake, and
News Corp, which has the other 49 percent.

News Corp, a customer of NDS, was also its owner for much of the
1990s, before it spun the company off. NDS floated in 1999, but
subsequently turned private again a decade later when News Corp and
Permira bought all its public stock.

During its public phase, NDS was the subject
of several lawsuits from rivals such as Canal Plus Technologies
and Echostar, who alleged that NDS had cracked their smartcards and
then distributed the codes to pirates.

The effect was that NDS's rivals had comparatively insecure pay TV
systems. Only the Echostar case went to trial, and NDS was ordered to
pay damages.

NDS has around 5,000 employees in the UK, France, India and China,
all of whom will be transferred to Cisco once the deal closes. That
closure is planned for the second half of this year.

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David Meyer is a freelance technology journalist. He fell into journalism when he realised his musical career wouldn't be paying many bills. His early journalistic career was spent in general news, working behind the scenes for BBC radio and on-air as a newsreader for independent stations. David's main focus is on communications, of both...
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